4. Interest-paying checking accounts - Their features and uses What are interest-paying checking accounts and how do they work? Most interest-paying checking accounts exhibit characteristics of both checking and savings accounts. Specifically, they earn relatively high rates of interest, especially compared with regular savings accounts, and allow relatively limited check-writing privileges. They are available through depository and nondepository institutions, including commercial banks, savings banks, credit unions, stock brokerage firms, mutual funds, and other financial services companies. What are some of the important characteristics of the following four major types of interest paying checking accounts? The following tables shows abbreviations for the types of accounts: Abbreviations AMA: Asset Management Accounts MMMF: Money Market Mutual Funds MMDA: Money Market Deposit Accounts NOW: Negotiable Order of Withdrawal Use the following table to indicate which of the money market accounts is described in the statements MMDA MMMI NOW Funds invested in this account are pooled to purchase very short-term debt securities. O Although this account is not protected by deposit insurance, it is extremely safe due to the securities backing the funds. Use the fundamental characteristics of the four major types of interest paying checking accounts to see the iniwa MMMF: Money Market Mutual Funds NOW: Negotiable Order of Withdrawal Use the following table to indicate which of the money market accounts is described in the statements. AMA MMDA MMMI NOW Funds invested in this account are pooled to purchase very short-term debt securities. O O O Although this account is not protected by deposit insurance, it is extremely safe due to the securities backing the funds. Use the fundamental characteristics of the four major types of interest-paying checking accounts to assess the following scenario. During a discussion about money market accounts with her coworker, Simone says that it is critically important to create a unified and coordinated bundle of checking, savings, stock brokerage, and mutual fund accounts whose transactions are reported in a single monthly statement Which interest paying checking account would you recommend to Simone? O An AMA O A NOW account O An MMMI